New $ELK Tokenomics

With the release of ElkNet v2, Elk moves one step closer to becoming a community-governed peer-to-peer network.
For Elk's first governance vote, users will be asked to vote on distribution contracts for the new ELK token. Answers will be recorded on-chain. In the event that any of the votes fail, funds will revert to the community treasury until further action is taken through future governance.

Here’s what you will be able to vote on:

ELK Token Distribution

ELK will be minted directly to hard-coded Reservoir System addresses on every chain except Avalanche, which will serve as the governance chain. On the governance chain (Avalanche), ELK will be minted to the following contracts and in the following amounts:
  • 10M ELK: directly minted to an Exploit Insurance contract
  • 5M ELK: directly minted to an ElkLabs Treasury contract
  • 2M ELK: directly minted to a Team Vesting contract
  • 10M ELK: directly minted to a Farming + ILP Reserve contract
  • The remaining ELK (minus the current circulating supply) will be directly minted to the Community Treasury contract

Exploit Insurance Contract

This contract stores 10M $ELK to be used for insurance against any unforeseen exploits of the ElkNet. It is subject to Elk governance. The proposed reserve is equivalent to more than 3 days of transfers based on current daily ElkNet transfers limits per chain (this assumes that a malicious exploit would be discovered in three days). In the event of a double-spend attack, ELK will be burned from this fund to ensure that the circulation of ELK never reaches more than 42M. In the event of attacks involving other tokens interacting with ElkNet, these funds can cover the losses incurred by third parties.

ElkLabs Treasury

This treasury contract is controlled by the ElkLabs multi-sig. The contract releases a maximum of 10k ELK per week up to a total of 5M ELK. These funds are intended to cover the development and operating expenses of ElkLabs in promoting the growth of Elk. Claims will not begin until ElkLabs becomes an incorporated entity.

Team Vesting Contract

This contract releases a maximum of 1k ELK per day up to a maximum of 2M ELK. These funds can be claimed without restriction by the developers, per the original litepaper, and are used for team compensation and regular operating expenses. Neither ElkLabs nor the Elk governance has oversight over the use of the funds.

Farm+ILP Reserve Contract

A unified contract storing emissions reserves until farming ends. This contract releases the agreed-upon daily emissions of 6.75k ELK + 6.75k ILP coverage (subject to annual halving). Note that the decrease in allocation compared to the original litepaper is due to emissions over the first year.

Community Treasury

The Community Treasury is controlled by Elk governance. The contract places a hard cap of 2M ELK to be spent by governance per year on proposals achieving a simple voting majority. A 2/3rds majority governance vote can lift the hard cap.